JUGGERNATH AUGURWALLAH Vs. EASMITH AND CO

JUDGEMENT

(1.) The plaintiffs by a contract dated the 28 of November 1905 sold 1,000 bales of jute of the Rajindra mark to the defendant firm of E. A. Smith & Co., the goods to be placed alongside the exporting vessel during the mon November, and to be paid for in cash against mate's receipts. Under shipping instructions of the same date received from the defendant firm, the goods were placed alongside the steamship Uganda, and in due course and in terms of the contract the goods were subsequently shipped on board the vessel and two mate's receipts, dated the 3 and 4 December for 875 and 125 bales respectively, made out in the names of the defendant firm were obtained by the plaintiffs. These mate's receipts accompanied by the plaintiff's bill against the defendant firm for Rs. 46,000 and the usual measurement and weighment certificates were on the 5 of December made over to the defendant firm for examination, and the defendant firm gave the plaintiffs on the same day the usual receipt containing the statement that the documents were accepted for examination. It is alleged that the defendant firm in fraud of the plaintiffs and without paying for the goods, and notwithstanding repeated demands made by the plaintiffs for payment of the price of the goods or return of the documents presented the mate's receipts to Messrs. Mackinnon, Mackenzie & Co., the Agents of the steamship Uganda, and obtained bills of lading in respect of the goods mentioned in the mate's receipts, which bills of lading the defendant firm subsequently wrongfully pledged with the defendant Bank.

(2.) The plaintiffs charge that the defendant Bank did not act in good faith in accepting the pledge, but that the same was accepted under such circumstances as to raise a reasonable presumption that the defendant firm were acting improperly in making the pledge.

(3.) There is no evidence of any kind to support the charge of bad faith made against the defendant Bank or to show that the defendant Bank had any notice of any improper dealing on the part of the defendant firm in connection with the pledge. It has, on the other hand, been satisfactorily proved by the defendant Bank that bills of lading in respect of the goods in question were pledged with the Bank in the ordinary course of business by the defendant firm, who were and had been for three years customers of the Bank and who had had previously large transactions of a similar nature with the Bank and whose conduct in respect thereof had never given the Bank any cause for suspicion. The pledge was made to the Bank without any notice of the plaintiff's present claim, and thereupon the defendant firm was given credit in their "account with the Bank for the full amount of the bills of exchange drawn against the goods represented by the bills of lading, and the defendant firm was subsequently permitted to draw against this credit by cheque, and the sums so drawn are somewhat in excess of the credit so allowed.